Government Introduces Special eVED Arrangements for Fleets

Introduction

The UK Government’s new Electric Vehicle Excise Duty (eVED) policy, set to take effect in April 2028, introduces a mileage-based tax for electric and plug-in hybrid cars. This policy has meaningful implications for transport operators, drivers, and compliance professionals, especially those managing fleets. Recent government announcements clarify how fleets can comply with eVED, aiming to reduce administrative burdens and improve operational efficiency.

Estimated Mileage Submissions for Fleets

To ease compliance for fleet, rental, and leasing companies, the Government will allow fleets to submit estimated mileage readings rather than exact odometer readings. This approach addresses concerns about the administrative burden of collecting precise mileage data from individual drivers. The Government expects these estimates to generally reflect the contracted mileage allowance for each vehicle or, in the case of rentals, the fleet average. This centralised mileage management removes reliance on drivers and simplifies reporting processes.

Bulk Payments and Liability Settlement

The Government plans to offer multiple payment methods for fleets, including a submission programming interface (API) and a web interface, catering to both large and small operators. Authorised fleet users will be able to pay eVED and Vehicle Excise Duty (VED) for their entire fleet on a fixed schedule and at an aggregate level.

To address concerns about outstanding payments when vehicles are removed from fleets, companies will be permitted to make top-up payments before disposal. This measure ensures that eVED liabilities are fully reconciled at the point of sale, protecting resale values.

Changes to Mileage Verification and Reporting

The original proposal required additional mileage checks for vehicles under three years old. This requirement has been dropped. Instead, private motorists must provide an odometer reading and an estimated mileage for the upcoming year at each VED renewal. The Driver and Vehicle Licensing Agency (DVLA) will use this information to calculate estimated eVED liabilities.

The DVLA retains the authority to request official mileage checks outside the MOT cycle if there is reasonable suspicion of fraud or non-compliance. Additionally, the Government plans to develop a system enabling motorists to submit mileage data directly via connected car technology, although this will not be mandatory.

Industry Response

The British Vehicle Rental and Leasing Association (BVRLA) welcomed the Government’s adjustments but remains critical of the eVED policy overall. Toby Poston, BVRLA Chief Executive, stated that while some administrative issues have been addressed, the tax’s timing and design could hinder the transition to electric vehicles by increasing costs and complexity for fleets.

Similarly, Vicky Edmonds, Chief Executive Officer of EVA England, criticised the policy for its complexity and potential financial impact on drivers. She emphasised the need for a simpler, fairer system and highlighted the importance of affordable public charging infrastructure to support the electric vehicle transition.

Mi Compliance Insight

Transport operators and compliance professionals should begin preparing for the eVED policy by reviewing fleet mileage management processes and exploring bulk payment options. Centralising mileage estimation and ensuring accurate record-keeping will be essential to meet the new requirements efficiently. Staying informed about further Government guidance and system developments, including connected car technology, will help maintain compliance and minimise administrative challenges. For tailored advice on managing eVED compliance, contact Mi Compliance.

Source: https://www.fleetnews.co.uk/news/government-announces-special-eved-arrangements-for-fleets